EnergyAustralia offers 29c kWh peak feed-in tariff.
EnergyAustralia is the first retailer to provide time-varying solar feed-in tariffs in Victoria. On September 15 2018, four residential electricity plans were launched that pay solar owners almost triple their standard feed-in during peak times. We’ll look at how time-varying tariffs stack up against single rate solar tariffs and which option is likely to be better for you.
Introducing a new variable
Earlier this year, Victoria’s Essential Services Commission recommended that solar owners get paid a price that better reflects the wholesale cost of electricity at the time they sell it into the grid. So they set minimum rates for an optional time-varying solar feed-in tariff. From July 1, retailers could provide this option to customers. But until last week no retailer was offering a plan. By 2019-20, all retailers will need to offer time-varying feed-in tariffs. The good news is, solar owners will be able to choose the feed-in tariff that’s right for them.
Time-varying solar tariffs – what does it pay?
Time-varying solar feed-in tariffs operate in the same way as Time of Use (TOU or flexible) tariffs. There are peak, shoulder and off-peak time periods. Different feed-in tariffs are paid to solar homes based on when they export electricity to the grid.
EnergyAustralia’s September 15 plans have feed-in tariffs paying:
Peak = 29.0 cents per kWh
Shoulder = 10.3 cents per kWh
Off-Peak = 7.1 cents per kWh
These rates are also the minimum feed-in tariff set by the Essential Services Commission.
The time periods for varying feed-in tariff plans:
Peak: 3pm-9pm Mon-Fri AEST/DST
Shoulder: 7am-3pm & 9pm-10pm Mon-Fri, 7am-10pm Sat-Sun AEST/DST
Off-peak: 10pm-7am Mon-Sun AEST/DST
Click here for a current list of plans offering time-varying feed-in tariffs.
EnergyAustralia is currently paying only 9.9 cents for its standard solar feed-in tariff in Victoria. In almost all cases, EnergyAustralia customers will be better off in moving to the time-varying tariff.
How much better will the time-varying feed-in tariff be for EnergyAustralia customers?
To calculate the effective feed-in tariff that Victorian solar owners could achieve with time-varying tariffs we’ll use an example. For a north facing solar system in Melbourne including six months of daylight saving, here is the breakdown of solar generation in the peak, shoulder and off-peak hours according to PVWatts:
Peak = 20.82% weekdays only
Shoulder = 79.02% weekdays, 99.84% weekends
Off-Peak = 0.16% weekdays and weekends
Multiplying this out, we get an average feed-in tariff of 13.076 cents (0.29*0.2082*5/7 + 0.103*0.7902*5/7 + 0.103*0.9984*2/7 + 0.071*0.0016) if all solar generated were exported.
Great, that’s better than most standard feed-in tariffs in Victoria right?
Yes it is, but there are a number of factors that will impact the average feed-in tariff including:
- Which direction your panels face. West-facing panels will increase the average feed-in tariff rate
- The amount of electricity consumed during peak hours. More consumption will decrease the average feed-in tariff rate
- Standby power. Higher standby power will take a larger portion of peak generation and decrease the average feed-in tariff rate
- Whether you have energy storage. Storage owners tend to soak up excess morning solar which will increase the average feed-in tariff rate
We expect that the majority of solar owners will receive an effective rate of between 10-13 cents on this time-varying tariff. The best way to determine what you would likely receive is to request your meter data history. This will tell you exactly how much solar you exported each hour in the last 12 months. Then you can crunch the numbers – something we hope to support you in doing in coming months.
The opportunity for savvy solar and storage owners
If you are willing to shift your usage away from peak solar tariff hours, there is an opportunity to earn higher feed-in tariffs. With around 15% of solar generation available in peak hours there is some scope to change behaviour and reduce consumption during those hours in order to increase feed-in credits. However, for those with energy storage, there is a bigger opportunity. If you can export energy stored in a battery at specific times of the day you can achieve much higher average feed-in tariffs. Using this feature, consumers can charge their energy storage systems using lower value off-peak electricity (15-20 cents) or solar generated during off-peak or shoulder periods (at 7.1-10.3 cents) and be paid 29.0 cents to export during peak time periods.
As an example, a storage owner with 10kWh of excess solar and “spare” battery capacity could export that into the grid at peak times and earn 29 cents using electricity that “cost” them 10.3 cents (the opportunity cost of not exporting to the grid).
- Per kWh, that’s an 18.7 cents margin, rounding down to 15 cents for losses in getting electricity in and out of the battery.
- With 10kWh, that’s $1.50 for every weekday where they would normally export excess solar in the shoulder period, and they have more than doubled the value of their solar by storing and exporting it.
- Assuming this solar owner will be able to store 10kWh every weekday for 8 months of the year, they will be better off to the tune of $1.50 x 5 days x 34 weeks = $255.
In the scenario shown, time-varying tariffs offer solar owners with larger exports and storage the chance to gain increased feed-in tariffs worth over $250p.a. That certainly helps improve the payback period for energy storage!
- Victoria now have time-varying solar tariffs - 24 September, 2018
- Victorian electricity prices on the rise in 2018 - 31 January, 2018
- Electricity prices to increase in NSW, SA and QLD: Why and what can you do about it? - 22 June, 2017
As far as I’m aware EnergyAustralia are not forcing existing customers to the new time-varying feed-in tariff so you should not be affected if you stay on your existing plan.
EnergyAustralia currently pay recipients of premium feed-in tariffs only the Government-sponsored premium feed-in tariff amount – 60 cents in Victoria and 44 cents in Queensland and South Australia. EnergyAustralia don’t pay premium feed-in tariff recipients the retailer feed-in tariff (currently 9.9c in Victoria) on top of that. Other retailers do in fact pay both.
As the time-varying feed-in tariff is a a retailer paid feed-in tariff (paid by EnergyAustralia, not the State Government) I expect that the time-varying feed-in tariff won’t be available to you even if you switched to one of these new plans. You’ll simply receive 60 cents per kWh regardless of when you export. To be sure give EnergyAustralia a call.
I am still puzzled. I get currently get 60c per Kw with my panels from the government, but that is due to run out in 2023.
The system above is talking about Energy Australia’s new varied system. Does that mean they will pay me to export power under the new system on top of the 60c subsidy I already get from the government, or does it mean no change for me or a cut?